In spite of the guns the communist use to stay in power they fail when they run out of other peoples money. The capitalists use their guns and F-35s and cruise missiles to keep the communists from taking over and destroying everything.

the EIA in its monthly Short-Term Energy Outlook trimmed American crude output this year to 12.3 million barrels a day -- 110,000 barrels lower than it had forecast previously.

It appears that the EIA will be introducing Peak one barrel at a time. Those who believe the price will go to the sky will be greatly disappointed. Each barrel of production that is cut will also reduces the economy by an amount that was powered by that barrel. Oil is an energy producing process, and the economy needs energy to function.

If it isn't produced here it will just be imported from Canada or elsewhere. Only loss to the economy being the transport and profit margin costs in excess of the local cost.

Well - if that's not bizarre what is, since Canadian production is also falling, and has been for some time. And for elsewhere did you mean Venezuela, the North Shore, the North Sea? US Shale production has been the only reason that the world has not Peaked since 2007, and the decline rate in existing formations means that once Shale begins its decline so also will the remainder of the world. As we said last year:

12/08/18 Peak Oil

Fighting over scraps is what humans are good at.

It now takes 90.3% of its production to replace shale's legacy decline. What happens when that hits 100%? Since we can say that 2005 was 0% (there was only a couple thousand operating shale wells, and almost zero legacy decline), and in 2018 legacy decline is 90.3% the rate of change is 7.525% per year. Which puts Peak at about March 2019. I would suspect to see a significant decline in the economy no more than a few months later. If you use the national news media as an informational source, you will find out about it maybe by 2023 (month unknown).

Shale added 117,000 barrels to its production in November, that is 3,900 barrels per day. On production of 6.15 mb/d, shale is growing by 0.06%. By next year it will be zero. Its legacy decline will have over taken it, and production will fall. Once the ramifications of Peak become understood there will be panic. The worse possible response to Peak will be fighting over the scraps; which is why that is most likely to be the exact thing that will happen. We will attempt to hold on to our last tiny bit of reserves by expending them on some totally useless, bloody, stupid war.

Although the impact of Peak will be interesting, it will not likely be very healthy![quote]

shortonoil wrote:Well - if that's not bizarre what is, since Canadian production is also falling, and has been for some time.

BS as usual. While Canadian production varies some from month to month it as held steady for the last two years. It is limited more by the market it is sold into then their ability to produce, that market being mostly the USA. Obviously if North Dakota produces more we need to buy less from Canada and the Canadians will just leave the tar sands in the ground until we are willing to pay for it.

A terrorist attack against a mosque in New Zealand killing 49 people took place today.

The global economic downturn will affect people at the bottom first. They will blame the politicians, the banks, the corporates, the immigrants...

No one will understand that the world is experiencing an energy crisis (falling EROEI) that will bring down the global economy.

The global economic expansion since the GFC has cost USD 60 Trillion in debt to buy USD 20 Trillion in GDP. It is the most expensive economic expansion in history. It required money printing in a way never seen before.

"It required money printing in a way never seen before"And that is what the deniers fail to grasp and that this money appeared as debt. Debt that that must be serviced, that inflates asset prices unrealistically and debt that puts a burden on posterity. A posterity with less energy and thus less growth and/or more contraction

You guys must have skipped most of your history classes. Debasing money during times of war goes back as far as the ancient Greeks but for a more modern example you should look up the history of currency during the US civil war "Green backs".

No one will understand that the world is experiencing an energy crisis (falling EROEI) that will bring down the global economy.

They still want to believe that the economy is powered by some scroungy old banker; they don't want to see that there is actually a little powerless munchkin behind the curtain. They don't want to believe that it is all a Shell Game for the distraction of the masses. We are living in the age of delusion; a world of pseudo realities. A world where manipulations of the currency system are supposed to magically manifest into the production of goods and services. A world where the listing of stock exchanges is supposed to be an indication of what food one can be put on the table, or whether one can pay their bills. They will most likely keep pouring hopium into the engine of the world until it sputters and stalls. The real world will continue to make itself known as the world's shipping fleets are scrapped, and its best made aircraft fall out of the sky. Their monetary Shell Game will continue to be played until entropy consumes the pea. What they will come to understand is that their world is no longer running. And then they will say; "that no one could have seen it coming". They will have arrived at their destination; a world for them where they can say EROI plays no part.

It seems now they have totally disengaged. The Stock market goes up, the Economy goes down. Even the so called statistics are disingenuous. Go to Detroit, or California, tent cities along the highway, food stamp use surging, drug addictions, suicides increasing. etc etc. Oh but the stick market and military complex are doing just fine as are the Billionaires

Yoshua wrote:The oil price started to rise in the summer of 2017 on falling crude inventory reports from EIA.

According to Art Berman's calculations U.S crude inventories are 137 million barrels higher today than reported by EIA.

If true, then EIA is cocking the books to raise the crude price to help producers stay solvent.

Do they have any other option? If the producers go bankrupt, then the oil stops flowing and we all go down.

137 million barrels would amount to seven percent of US inventory or seven days consumption. Hardly an earth shattering misstatement of the facts if indeed the EIA has it wrong. It might well be how much is in pipelines etc. and not yet measured or otherwise accounted for and a factor that is always there but always cancels out in the end so is immaterial. The guy makes a living preaching oil market doom so I think you should take anything he says with about a pound of salt.

Yoshua wrote:An inventory rise of 137 million bbl would have an enormous impact on the oil price.

Someone else did the calculation and came to the same result.

The sanctions imposed on Iranian and Venezuelan oil is then only about blocking their oil as the inventories are filled to rim.

The impact on oil prices would depend on the source of the error. Was that oil always in the system and not accounted for or is it a recent addition to supply that escaped detection? The former is much more likely then the later if the error truly exist at all which I doubt considering the source (or sources as you claim).

To this day, the difference between the 150-billion-barrel figure released by the “old Aramco” in 1977 and the 260-billion-barrel figure released in 1988 has never been substantiated by any supporting data.

It was not "Art Berman's calculations". It was the EIA's own calculations. Art Berman was simply pointing out the EIA's fudge factor called "unaccounted for oil". This fudge factor, which has always existed, has grown recently. That's not shocking, this number goes up and down over the years. Sometimes positive sometimes negative. 137 million change in this accounting variable is nothing. It changed by half a million barrels between 2014 and 2015. IEA has a similar accounting line called “miscellaneous to balance”. Congress actually investigated these "mission barrels" back in 1999 to determine why the discrepancy had grown so large. Turns out, no conspiracy:

MARCH 8, 2016 - Of the 1 billion barrels reportedly produced but not consumed, roughly 420 million are being stored on land in member countries of the Organisation for Economic Cooperation and Development (OECD). Another 75 million barrels are thought to be stored at sea or in transit by tanker somewhere from the oil fields to the refineries. That leaves 550 million “missing barrels” unaccounted for, apparently produced but not consumed and not visible in the inventory statistics.

Missing barrels are recorded in the “miscellaneous to balance” line of the IEA’s monthly Oil Market Report as the difference between production, consumption and reported stock changes. The miscellaneous item reflects errors in data from OECD countries, errors in the agency’s estimates for supply and demand in non-OECD countries, and stockpile changes outside the OECD that go unrecorded. IEA data currently shows a miscellaneous to balance item of 0.5 million barrels per day in 2014 and 1.0 million barrels per day in 2015.

Missing barrels have been a feature of IEA statistics since the 1970s. Most of the time, the oil market ignores the miscellaneous to balance item, but it tends to become controversial when it becomes very large, either positive or negative.

ERRORS AND OMISSIONSThe last time the miscellaneous to balance item was this large and positive (implying an oversupplied market) was in 1997/98 when the issue triggered fierce criticism of the IEA’s statistics. Critics accused the IEA of over-estimating supply, under-estimating demand, contributing to perception of a glut, depressing prices, and causing unnecessary hardship to the oil industry.

Senator Pete Domenici, chairman of the U.S. Senate Budget Committee, asked the General Accounting Office to investigate the IEA’s statistics and the question of missing barrels. In a report published in May 1999, GAO concluded “missing barrels are not a new condition, and the amount and direction of missing barrels have fluctuated over time. At any point in time, the historical oil supply and demand as well as the stock data reported by IEA could be overstated or understated by an unknown magnitude." It was not possible to “quantify how much of the missing barrels are due to statistical limitations and how much are the result of physical oil storage in unreported stocks”.

In 1997/98 episode, the IEA concluded most of the missing barrels went into non-OECD storage and uncounted OECD inventories. In the current episode, it is also very likely some of the 550 million barrels unaccounted for in 2014/15 have gone into unreported storage outside the OECD. China’s government is known to have been filling its Strategic Petroleum Reserve. More barrels are likely to have gone into commercial storage in China and in other countries outside the OECD.

MAY 20, 2015 - Oil-market watchers are struggling to reconcile the large estimated oversupply in the market with the much smaller buildup of reported inventories and narrowing contango in futures prices. U.S. crude stocks have indeed increased by around 100 million barrels since the start of the year while China’s stocks appear to have risen by between 50 and 100 million barrels. But that still leaves more than 100 million barrels that have simply vanished from the international statistical system. These lost barrels show up under error terms such as “miscellaneous-to-balance” and “unaccounted for” in reports published by statistical agencies.

MISSING BARRELSThe “missing barrels” problem is not a new one: it was the hot topic during 1998 and 1999 when I first began writing about the oil industry. Its December 1999 monthly report entitled “an un-fond farewell to the missing barrels” explained:

“During the first half of 1998 a large amount of the excess supply in the oil market was unaccounted for ... There was strong disagreement at the time as to whether these ‘missing barrels’ were the result of statistical errors, or whether they represented a large increase in oil stored in non-OECD areas. “Almost two years later ... the weight of evidence is that the missing barrels did exist and that they have now returned to the market. The return was triggered by the reversal in the shape of the forward price curve and the need for additional barrels following OPEC’s effective production limitation which began last March”